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With out-of-stocks stuck at an 8 percent average rate among food retailers and manufacturers, a study commissioned by Food Marketing Institute (FMI) and Grocery Manufacturers Association (GMA) and released at the recent joint industry Supply Chain Conference in Phoenix, offers solutions to on-shelf availability issues.
According to the JDA Software-fielded study, "Solving the Out-of-Stock Problem: A FMI-GMA Trading Partner Alliance Report," top concerns include the financial bottom line and the effect on the customer experience. "Shoppers say product availability is a top-three reason for where they shop, yet on average, every time a shopper comes into a store, one out of every 12 items on her shopping list, and one out of every 10 or less for promoted items, is not on the shelf," the report noted.
Critical areas pinpointed in the study were:
- Metrics: an opportunity exists for standardized processes and measurements
- Processes: better synchronization between retailers and manufacturers regarding event planning
- Organizational Issues: identifying clear accountability to address the problem
- Technology: standardization and integration between trading partner technologies
The report went on to recommended the following action items to address these issues:
- Move toward a baseline industry definition of on-shelf availability to ensure better communication and standardization for data exchange
- Seek agreement between retailers and suppliers on what data should be used for event forecasting
- Enable collaboration between retailers and suppliers to better align timing between issuance of event forecasts and production-scheduling requirements
- Establish thresholds for on-shelf availability and contingency plans for events